It can be very expensive taking care of growing dependant children and you ‘Thank Goodness’ when your child finally get a part-time job. The extra money can be used to help the child with necessities and it can be used to take some of the financial burden off of the parents. Money for the expensive shoes, the latest fashions, concerts and food can now be purchased by the gainfully employed teenager.
Then, when it is time to file your income taxes, you wonder if you can continue to file your child as a dependant even though the child is now an official wage earner.
Yes, your child with a job is still considered a dependant as long as the child lives under your roof, is in school and if you provide more than 50% of his or her total support.
According to the IRS, you have to provide at least 50% of the following – clothing, food, transportation, medical and dental bills, insurance premiums, donations to charities and some of the entertainment and recreation.
You have to include the income of your child – if it is used for support of the child – when you calculate the amount and the exact percentage of your financial contribution.
You can also consider these factors:
* The amount of the cost for your child to live in his/her bedroom during the year.
* The value of the food that your child eat. Be very reasonable when adding the cost of food. Don’t try to claim $8.95 for a homemade burger and fries that you cooked for dinner.
* The cost of some of the clothing and shoes that you purchase for school and work.
Tax laws are constantly changing. What may be true today may not be true tomorrow. Use caution and if there is any doubt, consult a tax professional.